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Changes to the Real Property Gains Tax and Stamp Duty since the announcement of the Budget 2019 Speech

February 22, 2019News Articleadmin

Article by : Roger Lo Ming

The Finance Minister had in his budget 2019 speech delivered on 2-11-2018 announced some intended changes to the real property gains tax and stamp duty. The followings are the summary of the budget speech and the implementation of the changes as at 18-2-2019:

Budget 2019 Speech Implementation
Real Property Gains Tax

1) Amendment to disposal of property in the 6th and subsequent years:

Individual : 5%
Company : 10%
Foreigner : 10%

Amended by Section 70 of the Finance Act 2018 (Act 812)

Effective: 1-1-2019

 

 

2) Exemption for disposal of property in the 6th and subsequent years:

  • Malaysian
  • Low cost, Medium Low & Affordable residential homes
  • RM200,000 and below

Effective: 1-1-2019

Implemented by PU(A) 360/2018 Real Property Gains Tax (Exemption) Order 2018:

  • Malaysian
  • Disposal in the 6th year and after
  • RM200,000.00 and below
  • Note: not restricted to low cost, medium low & affordable residential homes.

Effective: 1-1-2019

Stamp Duty on instrument of transfer of real property

RM1 ~ RM100,000 : 1%
RM100,001 ~ RM500,000 : 2%
RM500,001 ~ RM1,000,000 : 3%
RM1,000,001 and above : 4%

Effective: 1-1-2019

Amended by Section 68(d) of the Finance Act 2018 (Act 812)

Effective: 1-1-2019

Stamp Duty exemption for the purchase of first residential home

Type A:

  • 1st residential home
  • Price up to RM300,000
  • 100% exemption on transfer and loan
  • Effective: SPA executed from 1-1-2019 to 31-12-2020
Implemented by PU(A) 321/2018 Stamp Duty (Exemption) (No. 4) Order 2018:

  • 1st residential property
  • Price up to RM300,000
  • 100% exemption on loan agreement
  • Effective: SPA executed between an individual from 1-1-2019 to 31-12-2020
  • Note: no exemption on transfer of property.
Type B:

  • 1st residential home
  • Vendor is a housing developer
  • Price between RM300,001 and RM1 million
  • 100% exemption on transfer

Effective: SPA executed from 1-1-2019 to 30-6-2019

Not implemented yet.
Type C:

  • 1st residential home
  • Price between RM300,001 and RM500,000
  • Stamp duty:
    • RM1 to RM300,000 : exempted
    • RM300,001 to RM500,000 : prevailing rate
  • Effective: SPA executed from 1-7-2019 to 31-12-2020
Implemented by PU(A) 320/2018 Stamp Duty (Remission) Order 2018:

  • 1st residential home
  • Price between RM300,001 and RM500,000
  • Stamp duty on loan agreement:
    • RM1 to RM300,000: exempted
    • RM300,001 to RM500,000: ad valorem
  • Effective: SPA executed between an individual from 1-7-2019 to 31-12-2020

After the delivery of the budget 2019 speech, the Star had on 29-12-2018 reported that the Finance Minister had announced that “first-time homebuyers will be fully-exempted from paying stamp duty for properties up to RM1mil from Jan1”. The statement merely reiterates what was said in the budget 2019 speech. However, since the exemption has yet to be passed by the parliament as at the publishing of this article, interested house buyers will have to be patient and wait for the issuance of the relevant government gazette.

Next Post Remission of Stamp Duty w.e.f 1-7-2019

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